Despite making great contributions to the economy, the private economy is still facing many barriers in terms of scale and capacity.

Nearly 1 million enterprises and about 5 million individual business households have contributed about 51% of GDP, accounting for more than 30% of the state budget and creating more than 40 million jobs, accounting for more than 82% of the total labor force in the economy, nearly 60% of total social investment capital. Contributing greatly to the country’s breakthrough growth.

However, the private sector still faces many barriers in terms of scale and capacity. Limitations in policy implementation and access to resources reduce operational efficiency. It is time to change perceptions so that the private sector can be the country’s leading growth engine.

Developing the private economy – a lever for a prosperous Vietnam is the topic of the latest article by General Secretary To Lam published on the afternoon of March 17. The article orients the viewpoint and awareness in the entire political system about the role of the private economy as a leading important growth driver of the country.

At the same time, the General Secretary also proposed 7 key solutions to promote this sector, including: Perfecting institutions; Effectively protecting the rights of private enterprises; Prioritizing the building of large-scale private economic groups; Promoting startups, innovation, and digital transformation ; Reforming institutions and creating a service-oriented administration; Maximizing the liberation of resources such as capital, land, and technology; Developing a sustainable private economy , along with business ethics and social responsibility.

Mr. Dau Anh Tuan – Deputy General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI) emphasized that the article by General Secretary To Lam on private economic development that has just been published is a very important article for an important foundational sector of the country.

Among the many solutions presented in the article, Mr. Dau Anh Tuan said he was impressed with the group of solutions on institutional reform, creating an administration that serves businesses and the country. This is a group of solutions that demonstrates the great determination of the Party and the State in changing the business environment to be favorable for the private economy.

“General Secretary To Lam, during his working session with the Central Policy and Strategy Committee, also clearly stated the goals that Vietnam needs to achieve. For example, we must cut 30% of business conditions, 30% of administrative costs, and 30% of cumbersome procedures for businesses.

In the next 3 years, Vietnam will strive to be among the top 3 best countries in ASEAN in terms of business environment. This is a very clear and important goal for the private economic sector in the coming period,” said the Deputy Secretary General of VCCI.

Tax industry, 10 years ago Vietnamese enterprises needed an average of 537 hours/year to fulfill tax obligations according to a survey by the World Bank. Now it is only about 117 hours/year, meaning the number of procedures has been cut by up to 40%.

Mr. Dau Anh Tuan – Deputy General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI) cited the reform of the tax sector as an example of how effective the efforts to reform administrative procedures have been on people and businesses. For example, in the past, businesses had to make monthly declarations. Later, there were reforms, reducing the number from 12 times/year to 4 times/year.

Changes in tax procedures are an example that if all procedures can be strongly reformed in that direction, it will save a lot of costs, time and money for society. More deeply, it will make Vietnam’s administrative procedures more convenient, and Vietnamese businesses and goods can compete with other countries.

“Behind the competition of Vietnamese enterprises and Vietnamese goods with other countries, Vietnamese administrative procedures must be able to compete with a favorable level. I think this is a very big and very important goal of the leader of our Party and State,” Mr. Dau Anh Tuan added.

However, in a report by the Vietnam Federation of Commerce and Technology in 2023, 30% of businesses said they had to go back and forth multiple times to complete administrative procedures. Nearly 40% of businesses still reported that their documents were requested to be supplemented multiple times.

There are still many overlapping procedures, many sub-licenses and corruption, and informal costs still exist. This has created an invisible burden for private enterprises.

Up to now, it can be seen that the leadership of the Party and State is very strong and close. In fact, the story of cutting administrative procedures, improving the efficiency and attractiveness of the investment and business environment is assessed mainly in the implementation stage. When the implementation stage is not smooth, it will cause difficulties for businesses.

Mr. Dau Anh Tuan – Deputy General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI) said that the same good policy can have completely different levels of impact on the grassroots level. Some places implement it very well, but many places do not.

The important solution in the coming time is a program of action to properly implement this goal. For example, in terms of growth, the Government has recently assigned tasks to localities regarding very specific goals for economic growth. It is necessary to attach responsibility to the implementing apparatus and the leaders in the implementation process. 

“If we can see where businesses are satisfied, where investment capital is good, where there is great success in creating a favorable business environment, then there is certainly a good performing organization,” said Mr. Dau Anh Tuan.

Breakthrough reforms in policy institutions and the business environment are the conditions for the private economy to maximize its potential. Innovation, digital transformation and the application of new technologies are key factors for the private economic sector to break through and reach international standards.

One of the seven key solutions pointed out by General Secretary To Lam in the article is the need to soon build a legal framework to test sandboxes for new technology fields. Encourage private enterprises to invest in pioneering fields such as artificial intelligence, blockchain or AI.

A clear legal framework will encourage and motivate many businesses, especially Vietnamese start-ups, to dare to try their hand at new fields and get to work together.

This March, the Ministry of Finance will report to the Government to issue a resolution allowing the pilot operation of digital asset and digital currency exchanges . In the context of global technology integration, Vietnam has stepped out of its comfort zone. We have decided to experiment with unprecedented management mechanisms.

Mr. Dau Anh Tuan – Deputy General Secretary of the Vietnam Federation of Commerce and Industry (VCCI) said that many very large corporations in the world in the digital field are very excited about Vietnam’s recent rapid changes in removing obstacles in science and technology and digital transformation, many policy changes.

“I think it is very necessary for us to formalize and have a suitable legal framework. I think the application of controlled piloting and sandboxing in this field is a very important policy. The Government urgently directed the Ministry of Finance to have a legal framework this March. This is a very important and meaningful policy shift,” Mr. Tuan added.